Service Tax rate wef 01.06.2015 on Air Travel, Life Insurance, Money Changing & Lotteries Services

CA Sandeep Kanoi

In respect of certain services like money changing service, service provided by air travel agent, insurance service and service provided by lottery distributor and selling agent, the service provider has been allowed to pay service tax at an alternative rate subject to the conditions as prescribed under rules 6(7), 6(7A), 6(7B) and 6(7C) of the Service Tax Rules, 1994. Consequent to the upward revision in Service Tax rate, the said alternative rates shall also be revised proportionately.

2.6.1 Amendments to this effect have been made in the Service Tax Rules which will also come into effect from 1st June, 2015, that is the date with effect from which the increase in the Service Tax rate is made effective. [Notification No. 05/2015-ST 1st March 2015 Entry at Sl. No. 2(a)(e)(ii)] (Notification No.15/2015-Service Tax, dated 19th May, 2015 refers)

A. Booking of tickets for travel by air by an air travel agent under Rule 6 (7) of Service Tax Rules, 1994
	New Service Tax Rate wef 1st June 2015	Old Rate
1. Domestic Booking	0.70% of basic fare	0.60% of basic fare
2. International Booking	1.4% of basic fare	1.2%. of basic fare
“basic fare” means that part of the air fare on which commission is normally paid to the air travel agent by the airline.
B. Insurer carrying life insurance business under Rule 6(7A)(ii) of Service Tax Rules, 1994
	New Rate wef 01.06.2015	Old Rate
1. 1st year	3.50%   of Premium Charged	3%  of Premium Charged
2. Subsequent Years	1.75%   of Premium Charged	1.50%  of Premium Charged
C Sale or purchase of Foreign Exchange, including money changing under Rule 6(7B) of Service Tax Rules, 1994
Gross Amount of Currency Exchanged	New Service Tax Rate wef 1st June 2015	Old Rate
1. Up to Rs. 1,00,000	0.14% of gross amount of currency exchanged(min.Rs.35)	0.12% of gross amount of currency exchanged(min.Rs.30)
2. 1,00,000-10,00,000	Rs.140 + 0.07% of gross amount exceeding 1 lakh	Rs.120 + 0.06% of gross amount exceeding 1 lakh
3. exceeding 10,00,000	Rs.770 + 0.014% of gross amount exceeding 10 lakhs(max. Rs.7000)	Rs.660 + 0.012% of gross amount exceeding 10 lakhs(max. Rs.6000)
D. Taxable service of promotion, marketing, organising or in any other manner assisting in organising lottery under Rule 6(7C) of Service Tax Rules, 1994
Guaranteed Prize Payout	New Service Tax Rate wef 1st June 2015	Old Rate
Prize payout More than 80%	Rs. 8,200/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw	Rs. 7,000/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw
Prize payout Less than 80%	Rs. 12,800/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw	Rs. 11,000/- on every Rs. 10 Lakh (or part of Rs. 10 Lakh) of aggregate face value of lottery tickets printed by the organising State for a   draw